Podcast - 090: The history of mortgage rates and why current rates aren't as high as it seems
In this episode, realtor Anthony Luevanos and lender Angel Luevanos cover the history of mortgage rates since 1970. They bring on buyers agent extraordinaire Alejandro Medina. This podcast is in a quiz format.
The average 30-year fixed rate since 1971 is 7.77%The average 30-year fixed rate in 2000 was 8.05%
The average 30-year fixed rate in 2005 was 5.87%
The average 30-year fixed rate in 2010 was 4.69%
The average 30-year fixed rate in 2015 was 3.85%
The average 30-year fixed rate in 2020 was 3.1%
Currently, the average 30-year fixed rate is about 5.4%
2012 was the first year we saw the average 30-year fixed rate under 4%
2021 was the first year was the average 30-year fixed rate was under 3%.
Mortgage rates have decreased from decade to decade, so our current mortgage rates will likely drop under 5% again.
The current rate you get now is not your rate for life. You will have the opportunity to refinance to a lower rate if and when interest rates drop.
There is a unique window for homebuyers right now!
We currently have less buyer demand, homes are sitting on the market longer, we see price reductions, and the seller’s a more willing to negotiate.
This creates a unique opportunity for buyers to get a home at a reasonable price.
Yes, interest rates are higher, but we’ll likely see first-time home buyers reenter the market once they drop.
Hence, what happened in 2020 when we saw historical levels of buyers who qualify for more because of lower interest rates bidding homes up to record-breaking 20% home appreciation levels. Essentially all buyers who purchased before 2020 could refinance the mortgage interest off their payment and lock in a lower rate.
Buyers now have some leverage!
Sellers are becoming more motivated to sell. Sellers are covering closing costs or offering to buy down the interest rate for buyers. Listing agents are contacting buyers agents to ask if they have buyers. We have more price reductions than we have seen in years.
To view it on youtube, click here: https://www.youtube.com/c/theluevanosgroup